Retail sales and manufacturing output data from the US offers a heartening picture of gradual pick-up in the economy in the final months of the year.
US. retail sales rose broadly in October, suggesting the US started the fourth quarter with some vigour, and the first drop in wholesale prices in four months has pointed to subsiding inflation pressures.
Total retail sales increased 0.5 per cent, the Commerce Department has said, after rising 1.1 per cent in September. That was above economists' expectations for a 0.3 per cent rise.
The Labor Department in a separate report said its producer price index fell 0.3 per cent last month after rising 0.8 per cent in September. Economists had expected the PPI to fall only 0.1 per cent.
"The data are uniformly positive," said Eric Green, chief US economist at TD Securities in New York. Retail sales are "more than enough to keep the economy going. They continue to push back the recession fears that began this summer."
“Core sales have risen every month since August 2010, an unprecedented performance. It is too soon to make detailed estimates with confidence, but based on data so far we are happy to stick with our view that fourth-quarter consumption will at least match the second quarter’s 2.4 per cent and could easily beat it,” said Ian Shepherdson, Chief US economist at High Frequency Economics.
New manufacturing data from New York state also showed healthy gains in November, ending five straight months of contraction, while the outlook for coming months strengthened, the New York Federal Reserve Bank said.
The New York Fed's "Empire State" general business conditions index rose to 0.61, up from minus 8.48 the month before.
In the 12 months to October, retail sales were up 7.2 per cent. While October's retail sales report showed broad gains, weak income growth remains a constraint.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose at its fastest pace in nearly a year in the third quarter. But households are significantly cutting back on saving to fund their spending.
Retail sales last month rose as receipts from motor vehicle dealers increased 0.4 per cent. Sales of electronics and appliances soared 3.7 per cent, while receipts from building material retailers increased 1.5 per cent.